Harley says gaining traction with buyers even as retail sales fall

(Reuters) - Harley-Davidson Inc (HOG.N) reported weaker-than-expected quarterly retail sales as low prices for used motorcycles in the United States dampened demand for new ones.

A Harley-Davidson bike is displayed in their office in Singapore October 13, 2016. REUTERS/Edgar Su/Files

Harley shares rose 4 percent, rebounding from an early 3 percent drop, after executives on the company’s earnings call said it was making progress toward attracting new riders.

Harley’s loyal, but aging, customers are selling their motorcycles and few millennials are taking up motorcycling. And Harley’s more efficient models rolled out over the past year are pressuring prices of older motorcycles.

Year-to-date sales of used Harley motorbikes have risen through August, but retail prices increased as well after falling for 12 straight quarters, narrowing the price gap with new bikes, Chief Financial Officer John Olin said.

The weaker dollar, which is expected to limit the ability of Harley’s international rivals to offer discounts could also help, Olin said.

The company maintained its full-year shipment forecast of 241,000 to 246,000 motorcycles.

Harley shares rose 0.6 percent to $46.29 at mid-afternoon. They have lost a quarter of their value this year, compared with a 14.2 percent increase in the S&P 500 index .SPX.

Analysts remained cautious.

Aegis Capital analyst Rommel Dionisio said he would look for signs of an industrywide rebound in retail sales, or more market share gains by Harley, before getting more bullish on the stock.

Shipments slid 14.3 percent in the third quarter ended Sept. 24. Harley said it had cut production in the second half of 2017 to match demand.